EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations amend the Universal Credit Regulations 2013 (S.I. 2013/376) (the “2013 Regulations”) so that certain claimants aged 18 to 21 are not entitled to the housing costs element of universal credit. The Regulations come into force on 1st April 2017.
Regulation 2(2) amends regulation 6 (rounding) of the 2013 Regulations to provide that, when calculating the level of the threshold in paragraph 4C of Schedule 4 of the 2013 Regulations (which is inserted by regulation 2(3)(c)), that amount is to be rounded down to the nearest whole pound. It also makes a technical amendment to that provision.
Regulation 2(3)(a) and (b) makes minor technical amendments.
Regulation 2(3)(c) inserts new paragraphs 4A to 4C into Schedule 4 of the 2013 Regulations. Schedule 4 makes provision for the housing costs element of universal credit and applies to “renters”.
Section 11(1) of the Welfare Reform Act 2012 (c.5) provides for an amount to be included in an award of universal credit for housing costs. Paragraph 4A provides that section 11(1) does not apply to a renter who: is aged 18 to 21; falls within section 22 of the Act (claimants subject to all work-related requirements); and is a single person.
Paragraph 4B prescribes a number of circumstances in which paragraph 4A does not apply (and so where a claimant will be entitled to housing costs). The circumstances include where, in the opinion of the Secretary of State, it is inappropriate for the renter to live with each of his or her parents, including (but not limited to) where there would be a serious risk to the renter’s physical or mental health, or the renter would suffer significant harm, if the renter lived with them (paragraph 4B(1)(e)).
Paragraph 4C prescribes additional circumstances in which Paragraph 4A does not apply. Paragraph 4C(1) provides that it does not apply to a renter in an assessment period in which the renter’s earned income is equal to or exceeds a prescribed amount. The prescribed amount is the monthly amount a person would earn whilst working 16 hours per week at the National Minimum Wage (at the rate for 18 to 20 year olds (paragraph 4C(1)(a)) or, where the renter is employed under a contract of apprenticeship, the rate for apprentices (paragraph 4C(1)(b)).
Paragraph 4C(2) provides for a 6 month exemption during which paragraph 4A does not apply. The exemption applies where a renter’s earnings in each of the 6 months set out in paragraph 4C(3) are equal to or more than the threshold. The exemption begins on the date set out in paragraph 4C(2). The threshold is, similarly to 4C(1), the monthly amount a person would earn whilst working 16 hours per week at the National Minimum Wage (at the rate for 18 to 20 year olds or, where the renter was employed under a contract of apprenticeship for the duration of the relevant 6 month period, the rate for apprentices).
Regulation 3 is a saving provision with the effect that these Regulations only apply to awards of universal credit that are linked to residence in an area where the universal credit digital service is operating (that is areas where there are no restrictions on the persons who may claim universal credit).
Regulation 4 is a further saving provision with effect that, where regulation 3 would not otherwise stop the Regulations applying to an award (i.e. the case is linked to residence in a digital service area), the Regulations do not apply if the claimant was entitled to the housing costs element or housing benefit immediately before the first day on which the Regulations would otherwise apply. The saving ceases to apply to an award with effect from the day after the day on which it ceases to include the housing costs element.
An impact assessment has not been produced as this instrument has no impact on business or civil society organisations.